Nat Power in pounds 2bn Drax sale
Thursday 26 November 1998
The 4,000 megawatt Drax coal-fired station in North Yorkshire generates up to 10 per cent of Britain's electricity and consumes 10 million tonnes of coal a year.
News that National Power was selling its flagship station accounting for 40 per cent of output, coupled with a 16 per cent decline in interim profits, unnerved the City and the company's shares fell 4 per cent. Analysts warned the Drax deal could dilute earnings.
National Power said it aimed to complete the disposal of Drax in the first half of next year. Selling the station will cut National Power's share of the generating market from 21 per cent to 12 per cent. In return, it expects to get regulatory approval for the pounds 180m purchase of Midlands Electricity's supply business.
Midlands has 2.2 million domestic customers and made a profit on pounds 19m last year from electricity supply. The acquisition of the business, which employs 1,400 people, will give National Power 12 per cent of the electricity supply market in England and Wales.
In addition to the pounds 180m purchase price, National Power will also take on an estimated pounds 100m-pounds 200m of liabilities arising out of Midlands' long- term contracts to buy electricity at high prices. It is likely that the regulator will impose conditions on the deal, preventing National Power's generating arm selling electricity direct to the Midlands supply business.
Trades unions last night voiced fears for jobs and called for an early meeting with the two companies.
Drax, Britain's newest, most efficient and cleanest coal-fired station, opened in 1974. The nearby Selby coalfield was developed to supply the station and there is a railhead at Drax which takes supplies of coal direct from the pit complex.
First half pre-tax profits fell from pounds 260m to pounds 217m after a near halving of international profits caused by a dispute in Pakistan. The new government in Karachi has slashed payments for electricity from the Hub and Kot Addu stations which National Power operates alleging that the original contract, awarded by Benazir Bhutto's government, was the result of fraud and corruption. National Power, which has invested pounds 260m for minority stakes in the two stations, denies the allegations.
- 1 Labour rallies behind Flint as deputy leader to offset a Corbyn win
- 2 The difference between a psychopath and a sociopath
- 3 Dutch King Willem-Alexander declares the end of the welfare state
- 4 'Cool kids' can go on to become losers in later life, study finds
- 5 Bulletproof armadillo puts Texas man in hospital after shot bounces off hard shell
Labour rallies behind Flint as deputy leader to offset a Corbyn win
Kim Jong-un is awarded global statesmanship prize by Indonesia
Dutch King Willem-Alexander declares the end of the welfare state
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Calais crisis: Migrants that have made it to the UK reveal how Britain has matched their expectations
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...
£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...
£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...
£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...